New insurance measures rolled out for everyday deliveries

Updated parcel protection addresses common shipping concerns faced by online sellers and everyday customers.

Micro, small, and medium enterprises (MSMEs) have leaned heavily on delivery apps to reach customers beyond their usual radius. As more of their sales depend on third-party couriers, insurance has become an important layer of protection for the products they ship.

Metro Manila sees hundreds of thousands of parcels move each day. Most arrive without issue, but losses and damage still happen, leaving both sellers and customers vulnerable when something goes wrong.

According to the Global Parcel Theft Report in 2022, one out of 10 people globally have had their packages lost or stolen in a span of 12 months. Up to 10 percent of parcels worldwide are damaged during transit. 

This results in losses for both customer and seller, with the seller, more often than not, forced to issue a refund or suffer from negative reviews that can hurt their reputation and future sales.

Increased coverage for parcels

This is why several delivery apps have recently begun to provide insurance for the parcels they transport. Most recently, Lalamove, in partnership with Pioneer Insurance, announced that they launched a P20,000 coverage per delivery, regardless of the size or type of acceptable item in the parcel.

You can claim this coverage after seven days, and it covers incidents of theft, driver misconduct, accidental damage, and breakage due to natural calamities.

Lalamove makes close to 100,000 deliveries each day, with around 40 percent of these likely ordered by MSMEs. But Djon Nacario, managing director of Lalamove, said their users naturally still have anxiety about entrusting a third party with their items.

“What if anything goes wrong?’ It’s about fear and anxiety. Even if Lalamove tells all of them that we have a very good safety rating and a very good fulfillment rate, the anxiety will always be present. So to hurdle that anxiety, we increased our insurance coverage,” Nacario said during the launch. 

Before this, Nacario said, their regular insurance only covered a maximum of P3,000, which, based on their observation, was not enough to make people comfortable. That’s why they decided to increase their insurance coverage, especially to help merchants ship high-value products with more confidence.

Grab, J&T, Lalamove, and other transportation apps also provide similar insurance coverage, as MSMEs that earn most of their sales through e-commerce face growing pressure to deliver faster, with many consumers expecting same-day or next-day deliveries.

No one wants their deliveries delayed, let alone lost, damaged, or stolen. But having solid insurance coverage can help mitigate the fallout from unfortunate incidents so a business can recover and keep growing.

MSMEs as main drivers of e-commerce

E-commerce has exploded in the Philippines recently, and MSMEs have emerged as one of its main drivers. According to Lalamove, the number of MSMEs in the country rose from nearly 1 million in 2019 to roughly 1.24 million in 2023. That growth has fueled demand for reliable, cost-effective delivery services, but it also raises the stakes. As more small businesses rely on third-party couriers to get goods to customers, the potential losses from a single damaged or stolen parcel become far more consequential.

By raising coverage to P20,000, Lalamove is offering peace of mind, as well as sending a signal to merchants that it’s serious about reducing their risk and improving their bottom line. For many MSMEs, insurance like this could make the difference between a hiccup and a full-blown setback.

And from a business perspective, the increase could be a savvy competitive move. With parcel theft a growing global problem, delivery companies that can guarantee stronger protection may stand to win market share, especially among high-value sellers. According to the 2022 Global Parcel Theft Report, well over 1 billion packages were lost or stolen worldwide in a 12-month period, and online shoppers are increasingly wary. As such, Lalamove’s enhanced coverage could shape how merchants pick their courier, making insurance a deciding factor, not just price or speed.

 

 

With parcel loss and damage still a common issue for online sellers, delivery platforms are expanding insurance coverage to help MSMEs manage shipping risks and protect their products in transit.

 

 

 

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